Sree Rayalaseema Hi-Strength Hypo Limited ~~ IMMEDIATE BUY

Business : Today it’s CRUDE oil; Tomorrow it will be WATER… Yes folks, the next burning issue on our planet – CLEAN & SAFE water.

Today, I introduce a pioneer in water treatment industry, a commodity chemicals player - SREE RAYALASEEMA HI-STRENGTH HYPO LTD (SRHHL) - the torchbearer of the TGV Group, is the only manufacturer & exporter of Calcium Hypochlorite in India and among a few in the world. Welcome to TGV Group, growing leap & bounds under 3 decades old versatile leadership of T G Venkatesh, this group is diversifying big time into Pharmacy & healthcare, hospitality & education, Power & infrastructure along with manufacturing & exports. Constantly raising standards in water purification, SRHHL leads others by an example. What’s the buzz about Calcium Hypochlorite - Calcium hypochlorite is arguably the best chemical disinfectant for water far better than our household bleach {sodium hypochlorite}. Besides being used for disinfection plants of drinking water, it is used heavily as a sanitizer in outdoor swimming pools, as an ingredient in our daily bleaching powder & also used in bathroom cleaners, household disinfectant sprays, moss and algae removers etc. SRHHL's Aquafit brand is very popular, high grade calcium hypochlorite which has very wide applications in swimming pools and drinking water treatment bodies.

“A 1-pound pag of calcium hypochlorite in granular form can treat up to 10,000 gallons of drinking water.”

            Apart from Calcium Hypochlorite, SRHHL manufactures other highly useful chemicals with their annual capacities listed below : 

Product	Installed Capacity (Tons per annum)
Calcium Hypochlorite	19800
Stable Bleaching Powder	14850
Monochloro Acetic Acid	5445
Sulphuric Acid	49500
Chlorosulphonic Acid	26400
Bromine	65

Financials : The company is progressively witnessing a complete turnaround this FY. For a change, this time I present the company financial figures in a tabular chart below :

SRHHL	Sept Q	June Q	Half Year FY11	Projected FY11
Revenues (crores)	55.2	53.0	109.8	200+
Net Profit (crores)	8.0	6.4	14.4	25+
EPS	7.7 (0.37)	6.1 (4.0)	13.8 (4.3)	20+ (3.2)

Looking at the prolific figures above & assuming sustained growth one can expect a target of 150 Rs in another 6-7 months. At current price of 63 Rs – SRHHL is available at a PE of around 3 anticipating a forward FY11 EPS of 20+ The stock is a IMMEDIATE BUY!!

Positives – The company has a very strong SHP which has increased from 36% to about 46% in last 3 years since its listing on BSE in 2007

-        The demand of Calcium Hypochlorite is growing fast in international market.

-        Most of the raw materials are easily available locally because of its another listed group company (Sree Rayalaseema Alkalies & Allied Chemicals Ltd) thus saving all logistic cost.

-        There are no competitors for manufacture of Calcium hypochlorite.

-        Well, water treatment chemicals are also included in the same sector as water treatment holding same kind of importance and presents same kind of growth prospects.

Negatives – It’s a non-dividend paying company so far, but if you look at the extent of expansion prospects, I feel SRHHL seems to be retaining back the entire profit so that it could be deployed for further expansion projects. This seems to be a strong point in favor of shareholders.

Conclusion : The stock is already on a rally and has reached 63-68 levels. Time to HURRY to buy SREE RAYALASEEMA HI-STRENGTH HYPO LTD at current levels before FII/DII start doing so. This stock seems to be a value pick from all perspectives & one can expect 200 – 300% returns in 1 yrs time visualizing an EPS of 20+ this FY.

Stocks Results Update - Q3 2010 ! HY FY11 Earnings Analysis

Friends,

             All my recommended scripts have come out with strong Sept Q results. Lets have a qualitative earnings comparision of these scripts so far in FY11. The figures in brackets (in table below) are corresponding values in last FY i.e. FY10. The projected figures are evaluated assuming that the stocks will continue the sustained growth curve as established in FY11 so far :)

Scrip	Sept Q EPS	June Q EPS	FY11 HY EPS	Projected full FY11 EPS	CMP	Projected price(in 6 months)	Comment
Rama Phosphates	19.9	25.9	56.6 (34.5)	50	127.5	300	Strong hold – will rally
Dujodwala Products	4.7	5.2	9.9 (4.4)	16	55.4	130	Strong hold – will rally
Liberty Phosphates	5.3	4.0	9.3 (3.0)	16	73.2	160	Hold – will rally
Manjushree Technopack	2.0	3.8	5.9 (3.67)	14	95.4	150	Hold – gain pace
Simran farms	1.2	5.0	6.2 (3.5)	12	67.8	120	Hold – will consolidate
Satvahana Ispat	4.0	3.5	7.5 (2.9)	14	60.1	120	Hold & add on dips
TT limited	2.0	2.0	4.1 (0.78)	9.0	39.6	90	Hold – will gain pace
Orient Ceramics	2.3	5.0	7.3 (3.5)	14	90.2	140	Hold – slow mover
Poddar Pigments	2.6	2.5	5.0 (4.0)	12	58.9	100	Hold – slow mover

Enjoy investing :)

Liberty Phosphates Limited - IMMEDIATE BUY

                         To all my readers, it’s time to make merry !! Few of my previous calls have come out with flying colors making new highs on the charts this week. Simran farms(82 peak), Manjushree Technopack (102 peak) & Rama Phosphates(123 peak) are just to name a few. Please do remain invested as these are bound to rise as time passes on.
Now coming back on Liberty Phosphates -----
Business : Contrary to my practice, I am forced to repeat another bigshot fertilizer player – LIBERTY PHOSPATES LIMITED because of it repetitive prolific Q results. Breaking news !! Liberty Phosphates is repeatedly getting listed on “ET 100 fastest growing small companies” in 2009 and now in year 2010 too. With a sound track of over 4 decades, Liberty Phosphates, manufactures of Single Super-phosphate(SSP) and other phosphatic fertilizers seems to be on an expansion zoom with increasing PAN India presence starting new plants in South India. The Group currently has manufacturing capacity of 826000 MT per annum of SSP Fertilizer, 165000 MT per annum of NPK and 5000 MT of Magnesium Sulphate catering to about 18% of the SSP fertilizer demand in the country. The company have production plants at Udaipur & Kota in Rajasthan, Baroda in Gujarat, Pali in Maharashtra, Nimrani in Madhya Pradesh & Hospet in Karnataka. The company markets its SSP under a very strong brand name called “Double Horse”.
Financials : The company is witnessing a complete turnaround this FY. The company posted a trailing EPS of 3.84 with a topline of 204 crores and net Profit of 6.5 crores. The recent Government decision to deregulate non urea fertilizer prices coupled with company’s massive expansion plan has an exponential effect on company’s sales performance. LPL continues to exhibit exponential growth declaring prolific June10 Q results – an EPS of 4 with bottom-line of about 6 crores. The growth story does not stops here, the company in its latest Sept Q results posted an EPS of 5.28 with bottom-line of 7.7 crores. Riding on special attention by Govt. of India to fertilizer industry, this company seems heading for a forward annualized EPS of atleast 20 this FY. At current price of 74 Rs – Liberty Phosphates is available at a PE of less than 4. The stock is a IMMEDIATE BUY!!
Positives – The company has a very strong SHP which has increased from 34% to about 52% in last 6 years – awesome stats !!
- Paid up equity capital has not increased in last 2 years.
- Most of non urea fertilizer stocks (see my recommendation on Rama Phosphates) are on a boom due to Govt. deregulation on non urea fertilizers.
- The company just declared dividend and one can expect a rally in stock price.
Negatives – There are few strong competitors in the organized sector.
Conclusion : The stock is already on a rally and has reached 72-80 levels. Time to RUSH :) to buy LIBERTY PHOSPATE LIMITED at current levels before FII/DII start increasing their stake. Make use of the fertilizer boom cycle, buy this stock to get 250 – 300% returns in 1 yrs time visualizing an EPS of 20+ this FY.

Stocks Performance Update - Q3 2010

                 My blog has now become 2 months old. Thanks for overwhleming response by you readers & I look forward for sustained following. Lets have a look on the performance of my recommended stocks so far ...

Scrip		Recommended price(INR)	High attained(INR)	CMP(INR)	%change
Simran farms		55	82	78	+42%
Manjushree Technopack		68	101	98	+44%
Rama Phosphates		78	94	94	+21%
TT limited		38	43	42	+11%
Orient Ceramics		85	104	94	+11%
Poddar Pigments		48	57	55	+15%
Satvahana Ispat		50	54	52	+4%
Dujodwala Products		56	58	54	-4%

  Legends:

	strong - keep adding on dips
	hold and continue

Rama Phosphates Limited - IMMEDIATE BUY !!

Business : Today I bring up a leading fertilizer player – RAMA PHOSPATES LIMITED. Started in Indore 25 years ago, RPL operates primarily in two areas a) Fertilizer and b) Edible oil. The Company, being one of the largest producer in its field, is engaged in manufacturing phosphatic fertilizers viz. Single Super Phosphate, Mixed fertilizers namely NPK and Chemicals like Sulphuric Acid, Oleum etc. RPL has its biggest markets across various states especially Gujarat, Rajasthan, MP, Karnataka, Maharashtra & Chhattisgarh under popular brand name of Girnar and Suryaphool. RPL has 3 major production units across the country:

1)     Indore Fertilizer Plant – capacity of 165000 MT of SSP & 102000 MT of Sulphuric acid

            Indore Oil division – 165000 MT of edible oil

2)     Pune Fertilizer Plant - 165000 MT of SSP and 81600 MT of Sulphuric Acid

3)     Udaipur Fertilizer Plant - 132000 MT of SSP

Icing on the cake, Rama Phosphates is currently on an expansion drive – it has obtained consent from Rajasthan State Pollution Control Board for enhancing its production Capacity of Single Super phosphates at its Udaipur Unit from existing 132000 MT per year to 181000 MT per year. The Company shall commence its enhanced approved production during current FY.

Financials : The company has posted a trailing EPS of 20.29 with a topline of 134 crores and Profit of 11.27 crores. The company continues to exhibit exponential growth declaring prolific June10 Q results – an EPS of 25.95 with bottom-line of 14.4 crores. Going forward, considering overall fertilizer sector boom, RPL expansion spree & special attention by Govt. of India to agriculture industry, this company seems heading for a forward annualized EPS of atleast 30 this FY. At current price of 77 Rs – you have only one option – to buy RPL which is available at a PE of less than 3. The stock is a IMMEDIATE BUY!!

Positives – The company has a strong SHP which ranged between 45% to 41% in last 8 years – sound record.

-        Paid up equity capital has not increased in last 2 years.

Negatives – There are few strong competitors in the organized sector.

Conclusion : The stock is already on a run and has reached 75-82 levels. Time to HURRY UP J to buy RAMA PHOSPATES LIMITED at current levels before DII start increasing their stake. Beyond doubt, this stock has the potential to double/triple in next 8 months duration visualizing an EPS of 30+ this FY. On a serious note, if no manipulation is happening inside the company as can be felt with sound SHP, the stock is a long term hold and I can foresee surprise jump in stock price in a year time.

SENSEX & Nifty repeating History !!

          Friends, I have been silent on this blog for some time. Well, no prizes for guessing, most of the talking has been done by FIIs and foreign funds elevating SENSEX & Nifty to all time highs for the 2nd time in Indian Finance history. Sensex touched 20000 mark once again in 2.5 years time - an incredible achievement - it happens only in INDIA !!
          Folks who are invested in blue chips make the merry - ON TOP - as we all know this whole Sept rally (Nifty zoomed from 5400 odd levels to peak @6030) was led by large caps primarily. I will suggest all such folks to remain invested as we can see prolific buying in next quarter. There might be a genuine monthly October correction (partly due to continuous 10 days of FII rally and partly, on historic October downfall trends) probably to 5700 levels, take a breather and then Sensex should rally again in November & December (I assume there is no -ve financial storm in any foreign market)
          I also foresee that small caps & even mid caps to some extent, can rally in near time as they were silent spectators to current Sept FII rally. On contrary, lot of recommended stocks have corrected a bit and this is aother golden oppurtunity to enter at current levels. Lastly, I will say that we wont see a similar turmoil as seen post Feb2008 Sensex peak. We dont expect a sharp correction this time as rally is rationally supported by great Indian Inc growth story and corporate earnings. With above than normal monsoons, we are on edge of another fruitful financial quarter and soon I will update with Sept Q results for all recommended stocks.
Happy investing :)


        

SATHAVAHANA ISPAT LIMITED - BUY!

Business : Today I bring to limelight another dark horse in Iron & Steel industry - SATHAVAHANA ISPAT LIMITED - a growing player in production of Pig Iron & metallurgical Coke. Established in 1989, Hyderabad based SIL is engaged in the manufacture and sale of pig iron in core sector of the iron and steel industry. SIL has also started production of metallurgical coke - a key input material for Iron making. Off late, SIL is on a mass expansion spree – raising funds via issue of convertible warrants - to finance scaling its coke and pig iron producing capacities & increasing its market presence with a dual play! It recently started operation in its newly build 30MW co-generation of power in the Bellary district of Karnataka completing all background formalities along with signing Power Purchase Agreement (PPA) too. This co-generation facility would now take up expansion of the coke facility by 1.5 Lakhs TPA (Total of 4.5 L TPA now) and co-generation power to 10 MW with surplus metallurgical coke production to be sold in nearby market. Therefore, with the augmentation of enhanced pig iron and coke capacity together with upcoming cogeneration of power at the Greenfield site, SIL takes fullest possible advantage of the current uptrend in the Indian Iron and Steel industry.

Financials : The company has posted a trailing EPS of 7.73 (80% jump over FY09) for FY2009-10 with a topline of 384.7 crores and Profit of 25.44 crores (67% up from FY09). The company continues to grow as per its expansion plans declaring strong June10 Q results – an EPS of 3.48 (double of last FYQ1 earnings) with sales zooming to 105.6 cores. Going forward, considering strong core market penetration, this company is heading for an annualized EPS of 14 or so this FY. At current price of 50 Rs – SIL is dirt cheap and available at a PE of less than 4. The stock is a MUST BUY!!
Positives – The company has a consistent SHP which increased from 25% to 36% around in last 8 years – promoters are quite confident.
- Trouble time for Chinese Iron & Steel Industry - Chinese government decision for removal of tax rebates on steel products and ongoing appreciation of Chinese Yuan currency will put Chinese Steel companies to pass on the additional costs to the exporting countries, making Indian exports much more competitive!!
- India being the fifth largest steel producer is currently witnessing a boom in Iron & Steel industry with 2008 recession story left far behind.
Negatives – There are some competitors in the organized sector.
Conclusion : At a price of around 50 Rs, SATHAVAHANA ISPAT LIMITED is seriously lying abegging for buy. Start accumulating the scrip within 49-53 range and I can foresee a target of around 80+ in next 6 months visualizing a future annualized EPS of 14 this FY. In the long term the scrip can turn out to be a multibagger.

Market Correction - Buy on dips ..

Are you worried with the current market correction?? Not be so.. it's a healthy sign for further rallies .. Nifty has corrected by around 4% from a peak of around 5530 mid August & currently at 5350 levels. All my stocks are available @recommended prices or on slight dips which is a golden chance for those to enter who have missed the bus so far!! Correction are wonderful buying oppurtunities & India Inc is a growing chapter after 2008 recession.. So BUY NOW... Make use of current market dip...
        I believe Nifty is poised to make new highs - cross 6250 mark by 2011 March !! So make the right move... Please dont be disturbed by -ve market sentiments from a few analysts ..
REMEMBER : Undervalued Stocks of stable companies with strong earnings growth will continue to ride on beyond market corrections ... The only thing we should be cautious is a near recession which I dont see currently !

Dujodwala Products Limited - BUY NOW!

Business: Today I bring up another star player in field of Commodity chemicals & Resins – DUJODWALA PRODUCTS LIMITED – a pioneer in the field of Rosin and Terpene Chemicals. Based out of Maharashtra, DPL changed gears a couple of years back & forayed into producing variety resins – comes out to be the Game changer for the company which has been inflating its bottom-line and earnings exponentially Q over Q. DPL has its own indigenous state-of–art production plants equipped with most modern machinery and test laboratory facilities to meet the toughest norms of international quality controls. They produce Camphor derivatives, pine oils, Rosin, Turpentine oil derivatives and a range of Resin variants covering the following potential big markets:
- Pharmaceuticals / Pesticides
- Adhesives/Paints/Benzon
- Perfumery products / Pooja & Aarti products / Agarbathis / Nail polishes / varnishes
- Tyres / Rubber
- Textile / Leather derivatives
- Printing Inks
… & many more industries.. the list is endless.. the market reach & base is infinite …
Financials : The company has posted a Trailing Twelve Months - TTM EPS of 8.36 (whopping 1200% up from FY09) with a topline of 145.8 crores and Profit of 7.21 crores (whopping 1300% from FY09). The company continues to grow zooming northwards declaring mind-blowing June10 Q results (believe me !!) – an EPS of 5.23 (compared to 0.76 last FYQ1). Going forward, considering infinite addressable market and strong earnings growth, this company seems heading straight for an annualized EPS of more than 15 this FY itself. At current price of 57 Rs – you don’t have to think twice .. DPL is seriously undervalued and available at a PE of less than 4. The stock is a SURE SHOT BUY!!
Positives – The company has a strong SHP which increased from 41% to 44% now in last 4 years – you see that promoters are very confident about future performance & growth.
- Paid up equity capital has not increased in last 2-3 years.
- DPL has reach in almost every business vertical & in a country of 120 crores population you can easily imagine the horizontal demand explosion.
- This stock is recession proof.
Negatives – There are a few competitors in the organized sector.

Conclusion : The stock has a decent run so far this year to reach 54-58 levels. Time to HURRY UP to buy DUJODWALA PRODUCTS LIMITED at current levels before DII & FII start investing. Beyond doubt, this stock has the potential to double in next 6-7 months duration visualizing an EPS of 15+ on a conservative basis this FY. If the company continues to perform well as shown by its profits & earnings, the stock is a long term hold.

Poddar Pigments - BUY !

Business : Jaipur based Poddar Pigments Limited is coming out with flying colors – Yes, PPL produces colored Dyes and Pigments used in Textiles, Plastics & packaging, Engineering compounds, molding machines etc. The company claims to be the pioneer in India for fibre-grade Master-batches with a capacity of 8400 TPA and the first in India for creating Master-batches for dope dyeing for Poly propylene, Nylon & polyester multifilament yarn & fibres. Looking at its product offerings & portfolio, well, no prizes for guessing  that its pigments will always be in increasing demand from domestic as well as international customers. The potential markets for PPL products looks really impressive -

- Knitted Fabrics (Socks, Sportswear and undergarments etc.)

- Carpets (Floor coverings)   

- Woven Fabrics (Medicinal and Sanitary clothing)

- Household Textiles (Upholsteries, Textile Wall coverings, Garments etc)

- Non-woven - Hospitals and other sanitary supplies.

Financials : For FY2009-10, the company posted an EPS of 12.10 (almost 4 times of FY09) with a topline of 162.4 crores and net Profit of 14.20 crores (up whopping 257% from FY09). The company continues to be in sync with its exponential growth pattern declaring decent June10 Q results – an EPS of 2.49 (compared to 2.04 last year). Looking at the potential market reach and growing orders – this company seems pacing for an annualized EPS of more than 12 this FY also. At current price of 48 Rs – this stock is highly undervalued and available at a PE of less than 4.5. The stock is a DECENT BUY and one can hold this stock long for strong upside in time to come.
Positives : The company has a strong SHP which increased from 41% to 55% now in last 6 years – in fact, last year company management did a buyback of its shares from the market which highlights that future looks bright for Poddar Pigments – speaks volumes about promoters confidence in the company.

- PPL has a topline of more than 150 crores on an Equity base of just 10.61 crores – impressive !

- its Debt/Equity ratio is less than 0.5 and it’s backed by good working capital management.

- Poddar Pigments has a huge up growing addressable market.

Negatives : There are a few competitors in the unorganized sector.

- It addresses textile market largely which is a cyclic sector but icing on the cake ~ we are currently in a textile boom cycle.

Conclusion : The stock has been hovering around 44-49 range for some time which makes a perfect buying zone. The recent revival in company with strong Q figures makes Poddar Pigments a SAFE BUY @ CMP of 48 Rs for decent returns in medium to long term. The stock has definitely the potential to double at least in next 8-9 months duration visualizing an EPS of 12+ this FY. If the company continues to perform well as shown by its profits & earnings, the stock is a hold for 2-3 years term for further strong gains.

MANJUSHREE TECHNOPACK LTD - Buy !

Business : Ever wondered who is behind designing and packaging jars/containers for Horlick, Bournvita, Boost, Tang, Vicks, Kissan ketchups, Kinley/Limca/Fanta & coca cola beverages etc ???

Today, I bring to you another multibagger in the making- MANJUSHREE TECHNOPACK LTD - a recenlty listed Bangalore based packaging solutions provider with an experience of over two decades in providing its customers with cutting edge plastic packaging solutions. Founded in 1977 by Vimal Kedia as a Umbrella manufacturing company, Manjushree forayed into manufacturing of Plastic Flexible packaging in 1984. The company has answer for every packaging ask - Be it Preforms, Pet Jars and Bottles to Retortable Oxygen barrier Multilayer containers. Today, Manjushree is the largest converter of PET and Preforms in India with an installed capacity of 30,000 MTPA and caters packaging solutions to more than 60% of FMCG clients. We all know that PET containers are not that cheap in market and hence arose a need to develop a container with the attributes of PET, but at a lower cost. MT rose to occasion and came out with a breakthrough innovation - Polypropylene (PP) containers - offers a balance of clarity, impact strength and cost. MT is the pioneer of PP ISBM technology in India.
Financials : For FY2009-10, the company declared a topline of 152.5 crores (35% up from FY09) and net PAT of 10.57 crores (up 41% from FY09) with annualized EPS of 7.80 (whopping 41% up from FY09). The company continues further to declare outstanding results for Q1FY2011 – net Profit of 59 crores (62% growth over Q1 last FY) and an EPS of 3.88. Looking at the organic & horizontal volume expansion with expanding FMCG sector – this company is clearly heading for an annualized EPS of more than 14 in this FY itself. At current price of 68 Rs – this stock is highly undervalued and available at a PE of less than 5. The stock is a MUST BUY and one can expect a huge upside in time to come.
Positives – The company has an outstanding SHP which increased from 54% to 57% now in last 2 years – entrust promoters confidence in the company.
- Manjushree has been growing at CAGR of almost 25% for last 5 years. I can safely visualize this growth rate to continue for next few years based on the aggressive expansions the company has been undertaking.
- MT serves all variety of markets from Spices, Mineral waters to Pharmaceuticals, Liquor etc.
- Manjushree clients include biggies like Cadbury, Heinz, Pfizer, TTK Healthcare, Nestle, ITC, Unilever, PEPSI, Coca Cola, P&G, Bisleri etc to name a few. The list is ever growing ~~~
- MT has opened and is managing the only MUSEUM in India dedicated to packaging - It presents the world of product packaging that spans almost a hundred years. On display are tins, boxes, vanity kits, biscuit boxes, wine bottles, water dispensers and much more. A treat to the eye.
Negatives – None
Conclusion : The stock has corrected a little from its peak of 75 /- this year. Start accumulating MANJUSHREE TECHNOPACK at current price and on dips and I can easily foresee a target of 120-130 in next 8 months estimating an EPS of 14+ this FY. I won’t define a timeline to hold as MT seems to be a giant in the making. This counter looks very strong and the stock is a hold for long term.